Transcript E-filing of Company Tax Return

Bringing XBRL tax filing to the UK
Jeff Smith,
Customer Contact, Online Services,
Agenda
•
Why XBRL?
•
External review of HMRC Online Services.
•
The Company Tax Return.
•
XBRL progress to date.
•
Next steps.
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Lessons learned.
17th May 2006
Why XBRL?
•
HMRC first became aware of XBRL in 2001.
– What attracted us:
1 vision of streamlining the end to end financial reporting
process - linking business, accounting and tax software.
2 access to data - rather than everything on paper.
3 picking up an external initiative - origins within the
financial community, not Government driven.
4 possible data standard in a wider government context.
17th May 2006
External review of HMRC online services
•
July 2005 - UK Government
asked Lord Carter to advise on
measures to increase the use of
HMRC’s key online services, in
order to ensure sustainable and
efficient service delivery for
taxpayers, while continuing to
support compliance.
•
March 2006 - UK Government
accepts recommendations in full.
17th May 2006
Key recommendations (for XBRL):
•
“All companies should be required to file their company tax returns
online, using XBRL …….. for returns due after 31 March 2010.”
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“Our view is that HMRC should not require online submission of
company tax returns until XBRL has been implemented and has
bedded down.”
•
“We also recommend that they [HMRC & Companies House] should
work towards providing a joint filing facility so that companies and
their agents only have to submit the same information once.”
17th May 2006
Company Tax Return
CT600 Form
- scope for a simpler
Statutory Accounts
approach
Computation
1
Return form (CT600)
2
Accounts
3
Computations
•
Need ALL three components
to make up a valid return
•
Complex information
•
Difficult to put together
17th May 2006
Computations are complex
•
Accounts figure of profit
adjusted for tax purposes
– capital allowances
– depreciation etc
•
Often 30 pages +
•
Free format
•
No standard layout
•
Paper documents
– usually produced using
specialised software
– information inaccessible
– no data flow to HMRC
systems
17th May 2006
Accounts are currently paper based
•
We require full accounts including
Profit & Loss
•
Again all held on paper with little
data flow to HMRC systems
•
Limited information available for risk
assessment and for Government
financial planning
•
Companies required to submit
accounts separately to other
Government Departments
17th May 2006
XBRL e-filing progress
•
Late 2001 - Workshops with accountants and software vendors agreed
a phased approach to CT e-filing with XBRL seen as an integral part
from the outset.
•
Phase 1 - delivered in March 2003
– XML based CT600 Return + computations + accounts (as pdf’s).
– enabled proving of the basic service before moving on to Phase 2.
•
Phase 2 - delivered in February 2006
– allows computations to be submitted in XBRL format
– HMRC have developed the underlying data structure in conjunction with
accountants and software vendors. Complex task as there is no standard
format for computations and need to avoid any constraints in how information
is presented on screen or when printed.
17th May 2006
Next steps - XBRL accounts
•
Will be able to accept XBRL accounts as soon as suitable accounts
taxonomies are available:
– UK Companies House (small, audit exempt companies later in 2006 and
full accounts in 2007)
– UK GAAP (HMRC are assisting with development)
– IFRS, US GAAP etc
•
Straightforward task for HMRC to link to new taxonomies.
•
HMRC XBRL service designed to interact with third party software
systems only
– HMRC’s own online application does not include an XBRL capability
(although could be made to do so if customers need it).
17th May 2006
Next steps - working towards mandatory
XBRL e-filing in 2010
•
Technical specification is already published.
– work closely with software vendors and accountants to help them adopt
XBRL (main task is mapping our taxonomy to their products).
– encourage accountants to start XBRL filing early - working collaboratively
to prove and fine-tune the service, especially for the more complex cases
(e.g. use of taxonomy extensions).
•
Widening the net.
– joint workshops with software vendors on online services?
– how do we reach the smaller accountancy firms? May not be represented
by professional bodies.
– software availability for very small companies?
17th May 2006
Lessons learned
•
CT Computation - Taxonomy development - 4000+ items
– Large scale data analysis exercise - requires an iterative approach.
– lack of any existing structure (free-format) main reason for complexity
– but feasible with assistance from accountants and software vendors.
– started with Excel, but soon required specialist XBRL support and benefited
from XBRL software tools (ensuring conformant to standards and internal
consistency and validation).
– Try to keep it simple!
– taxonomy itself and XBRL features
– e.g. limited use of computational and formula linkbases.
17th May 2006
Lessons learned
•
Display (rendering) of XBRL submissions (on screen and printed) is a key
business requirement, both for HMRC, accountants and company directors.
– clients need to approve what is to be submitted - a string of data is not enough!
– stylesheets have proved to be very difficult to create, even for simple accounts
and computation - now an XBRL Domain Working Group issue.
– US Securities & Exchange Commission share our concerns about rendering.
17th May 2006
Lessons learned
•
Consider use of software tools for both taxonomy creation AND
review when external organisations join in.
17th May 2006
Lessons learned
•
Provide comprehensive documentation
17th May 2006
17th May 2006
Bringing XBRL tax filing to the UK
The End!